July 30, 2014

I totally forgot about my Updown portfolio. I haven't written about it since September 2013. I don't recall the last time I even logged into the account. I clearly haven't been actively managing the account.

Here's how my portfolio has compared to the S&P 500 so far in 2014 :

Freeby50

S&P 500

diff.

Jan-14

-1.9%

-3.6%

1.7%

Feb-14

1.3%

4.3%

-3.0%

Mar-14

2.7%

0.7%

2.0%

Apr-14

0.5%

0.6%

-0.1%

May-14

0.3%

2.1%

-1.8%

Jun-14

0.6%

1.9%

-1.3%

Jul-14

2.1%

1.0%

1.1%

SUM

5.6%

7.0%

-1.4%

The S&P500 index is beating me by 1.4% thus far for the year.

I'm still ahead of the S&P500 for the entire portfolio history. I'm up 77% total and the S&P500 is up 49%. However most of the difference there was in the first couple years when I was really actively playing the portfolio and managing it. For 2011 to 2014 I've underperformed the S&P500 by about 10% total.

I also have 16% of my portfolio in cash. That will cause me to lag the performance of the index by a ways since only 84% of my money is actually in the market. So for example if I had 7% gains in the year on my stocks like the S&P500 then my portfolio would only be up 84% of that or 5.88%. SO the asset distribution I've got of 16/84 cash vs stocks does explain some of why I lag the index. The cash was mostly thrown off by dividend payments as I've had a high dividend yield investment strategy in general. Updown doesn't seem to have anyway to do dividend reinvestment which is a pity.

About 60% of my stock holdings are in just 5 stocks T, WDC, BA, MSFT, MRK. I can't for the life of me remember why I bought those stocks, but thats most of what I own in the portfolio. I am sure I had some logical reason to buy those at the time, but who knows that those reasons are now. I haven't looked at them lately so I don't know if they're stocks I'd own right now. T & BA each did worse than the S&P500 so far in 2014 but WDC, MSFT & MRK have outperformed the index. The other 40% of my holdings are a mixed bag of 14 other stocks. Again I now don't remember why I bought any of them.

So this is what happens if you neglect your investments. I end up with a pile of stocks I bought which I may or may not feel are worth owning today, I have too much money sitting idle in cash and I get beat by the S&P500 index.

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